The Mayor, Assembly, School Board, and Planning Commission are hosting 3 Question & Answer gatherings on September 12, 19, and 26, 6:30-7:30 PM at the Haines Borough Public Library. You will be able to take a look at the 12-page long 2011 Alaska Public Offices Commission (APOC) Financial Disclosure form to see what it requires. You will also be able to examine the local requirements that will go into effect should Proposition 1 pass.
I have prepared some talking points for the Q&As that I would like to share with you.
The points discuss financial disclosure in general and our local law
relative to the state law in particular.
I left a brief discussion of the constitutionality of financial
disclosure laws to the last, but in some ways, it is the most interesting
element of the discussion. Don’t
forget to read all the way to the end!
Financial disclosure
requirements have been in place for the last 40 years.*[1]
The purpose of
financial disclosure is *
·
to provide information necessary for the
government to identify and resolve conflicts of interest among public
officials;
·
to enable citizens to better inform themselves
about their representatives and candidates;
·
to encourage officials and candidates to take
more care not to engage in activities that would present actual or perceived
conflicts of interest;
·
to maintain transparency and accountability in order to increase the public’s confidence in government.
Financial disclosure
requirements are criticized as overly intrusive because*
·
we have a citizen type of government and it can
be expected that conflicts, real and apparent, will naturally arise since
citizen’s should not be expected to give up personal financial
interests when
assuming office;
·
existing ethics laws are sufficient to deal with
conflicts that arise (be sure to review the attached Haines Borough ethics
statutes);
·
public disclosure can generate inappropriate and
gossipy scrutiny that detracts from officials ability to carry out their
obligations;
·
public scrutiny caused by disclosure deters the
most qualified persons from running for positions or accepting appointments;
·
personal financial dealings are irrelevant to
preventing conflicts of interest and thus the disclosure requirements amount to
unwarranted intrusions into personal privacy;
·
disclosure laws infringe upon the privacy rights
of individuals other than the public officials required to make the disclosure
Comparison of the
local Haines Borough Law to the state law.
The Assembly has adopted a local financial disclosure law to
address the more intrusive elements of the state law while protecting the
public’s interest in public official’s accountability and transparency. The local law relaxes some of the
state requirements while increasing the penalty for failure to comply with the
local law and extending the local law to include domestic partners in the list
of dependents for whom a filer must account.
The Assembly has increased the threshold for reporting
income and loans from $1000 to $5000 and has limited the requirement to report
interests in contracts and leases to those that are relevant to the Haines
Borough rather than to contracts and leases in general as required by the
State. The Assembly determined
that the state’s threshold of $1000 requires a public official or candidate to
disclose details of his/her finances that are more detailed than necessary, and
thus intrusive, for determining conflicts of interest.
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Haines Borough Law
(HB 12-07-296)
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State Law (AS
39.50.030)
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Content of the Disclosure
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Disclose separate sources of income over $5000, including
the names of clients if the client or customer provided more than $5000 in a
year to the business and if the naming the client is not against the law.
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Disclose source and total amount of income over $1000.00,
including the names of clients if the client or customer provided more than
$1000 in a year to the business and if the naming the client is not against
the law.
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Omitted in Borough law.
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Describe how the income was earned, including the nature
of the service performed, and the approximate number of hours worked.
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Disclose source of gift in excess of $250
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Same.
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Identity by name and address of each business in which the
filer had an interest, or was a stockholder, owner, officer, director,
partner, proprietor, or employee, except that interest of less than $5000 in
the stock of a publicly traded corporation need not be reported.
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Same, except that the state requires the filer to report
interest in a publicly traded corporation if the interest is less than
$1000.00.
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Identity and nature of each interest in real property in
the Haines Borough.
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Identity and nature of each interest in real property
wherever it may be.
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Identity of each trust or other fiduciary relation in
which the beneficial interest exceeds $5000.00
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Identity of each trust or other fiduciary relation in
which the beneficial interest exceeds $1000.00
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Haines Borough Law
(HB 12-07-296)
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State Law (AS
39.50.030)
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A list of all mineral, timber, oil or any other natural
resource lease or lease offer made in the Haines Borough…in which the filer
holds a controlling interest.
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A list of all mineral, timber, oil or any other natural
resource lease or lease offer made wherever located …
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A list of all contracts or offers to contract with the
State of Alaska or with the Haines Borough or School District…in which the
filer holds a controlling interest.
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A list of all contracts or offers to contract with the or
an instrumentality of the state…in which the filer holds a controlling
interest.
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Disclosure of any loan or loan guarantee made to the filer
in the amount of more than $5000 and the identity of the creditor to whom the
filer owed more than $5000.
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Disclosure of loans…in the amount of $1000 or more and the
identify of the creditor to whom the filer owed more than $1000.00.
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Filers are required to report the finances of domestic
partners in addition to spouses and dependent children.
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The state does not require elected of appointed municipal
officers to report finances of
domestic partners.
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Disclosure statements are open to the public and held in
the Clerk’s office, but shall not be sent to the Alaska Public Office
Commission and shall not be posted on the Haines Borough website.
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Disclosure statements are available through the municipal
Clerk and APOC office in Anchorage and may be posted on the APOC website.
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Penalty for Failing
to File a Disclosure statement
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If a candidate fails to file a disclosure statement, the
candidate will be disqualified.
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NA
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If a filer files late, or if the statement is incomplete,
the penalty is $10 per day for each day delinquent.
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Same penalty delivered by state APOC.
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A municipal officer who refuses to file, cannot be
confirmed, hired or appointed and forfeits and may not be paid any salary,
per diem, or travel expenses until compliance and may be guilty of a
violation which upon conviction is punishable by a fine of not less than $100
nor more than $1000.
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A filer who knowingly files a false or misleading
statement may be subject to penalties up to $10 per day and may be guilty of
a misdemeanor.
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The Borough proposes
disclosure of the source of income over $5000.00 and does not require
disclosure of the total amount. The
state requires disclosure of the source and total amount of income over
$1000.
·
Other municipalities have adopted this same
standard when exempting themselves from the state regulations:
o City
of Ketchikan (2.05.020)
o City
of Kenai (1.85.020)
·
Many municipalities exempted themselves from the
state regulation and rely solely on conflict of interest statutes to identify
and resolve real and perceived conflicts of interests.
o Some
examples are Cordova, Craig, City of Fairbanks, City and Borough of Sitka,
Delta Junction.
Conflicts of interest
may arise while the official is in office. Financial disclosure statements describe financial interests
for the prior calendar year. The
public is protected from conflicts of interest on the part of its public
officials by local conflict of interest statutes. It is these statutes that protect the public’s interest as
situations arise during the course of the current year. Several key Haines Borough ethics statutes
are cited below.
2.06.020 Scope of code of ethics.
C. An assembly member or
member of any board or commission may not deliberate or vote on any matter in
which the member has a substantial personal or financial interest.
2.6.060 Improper influence in borough grants, contracts, leases, and
loans.
E. A public officer shall
report in writing to the borough attorney a personal or financial interest held
by the officer in a borough grant, contract, lease or loan that is awarded,
executed, or administered by the agency the officer serves.
2.06.080 Disclosures of conflicts by public officers other than employees.
A. A public officer other than an
employee, who is involved in a matter that may result in a violation of this
chapter, shall disclose the matter on the public record and ask to be excused
from the discussion and official action on that matter. The presiding officer shall
determine whether the officer’s involvement would violate this chapter. If the
presiding officer determines that a violation would exist if the officer
continues to participate, the officer shall refrain from voting, deliberating,
or participating in the matter. The presiding officer’s decision may be
overridden by a majority vote of the body.
2.06.100 Actions voidable.
D. The borough attorney, via the borough manager, may recover any fee, compensation, gift, or benefit received by a person as a result of a violation of this chapter by a current or former public officer. An action to recover under this subsection must be brought within two years after discovery of the violation, or five years after the violation occurred, whichever is sooner.
2.06.110 Criminal sanctions additional.
To the extent that violations under
this chapter are punishable in a criminal action, the criminal penalty is in
addition to the civil remedies set out in this chapter.
Constitutionality
Issues of Financial Disclosure Requirements*
The United States Supreme Court has not directly ruled on
the constitutionality of financial disclosure requirements but in Buckely v. Valeo (1976), the Court’s
ruling strengthened support for disclosure laws.
…the court determined that campaign
finance disclosures are justified by the public’s interest in information
concerning candidates, the interest in deterring corruption, and by the
government’s need for transparency in order to policy related campaign finance
regulations. Buckley made clear that
the public’s interest s in the disclosure of campaign contributions will almost
always outweigh public officials’ interests in keeping this information
private. Buckley also enshrined the now famous observation of Louis Brandeis
that “sunlight is said to be the best of disinfectants; electric light the most
efficient policeman.” (page 54)
Privacy Rights: Is
financial privacy encompassed within the right to privacy? *
Most courts have followed the lead provided by Plante v. Gonzales (1978). This case resulted in the application of a
balancing test to the question.
Privacy interests protected by the Supreme Court have generally fallen
into two categories: autonomy and confidentiality. In Plante v. Gonzales the court refused to include financial privacy in
the group of privacy interests classified as autonomous (familial matters such
as contraception, child rearing, and marriage); and adopted a balancing test
with respect to deciding if financial interests belonged in the second category
of privacy interests: matters which are confidential. In this particular case, the court found that “the public’s
interest in receiving disclosure outweighed officials’ interests in keeping
their financial matters private” (p. 53).
[1] All asterisked (*) material is
extracted from Ethical Standards in the Public Sector (2008), Ed.
Patricia E. Salkin, Chapter 4: “Sunshine in the Statehouse: Financial
disclosure Requirements for Public Officials, “Amy Lavine, Leah Rush , American Bar Association, Section of
State and Local Public Law, downloaded from the internet.
